Trustee in Madoff case seeks $1B from Mets trustee
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Madoff bankruptcy trustee Irving Picard is going after as much as $1 billion from the New York Mets owners, not just the $300 million in profits alleged in his lawsuit, according to Picard's counsel.
In an e-mail response to Newsday, David Sheehan said Picard wants some of the initial investments Sterling Equities Associates made with Bernard Madoff, as well as about $14 million in so-called "preferences." That is money received by the Wilpon-family controlled Sterling entities in the 90 days before Madoff's firm folded in December 2008.
Picard also seeks 9 percent interest from at least 2002 on the $300 million in alleged fictitious profits and a piece of Sterling tax refunds related to its Madoff investments, according to the complaint unsealed Friday.
Dave Howard, the Mets' executive vice president for business operations, said only that the Mets ownership group stands by Friday's statement, which vehemently denied the allegations in Picard's complaint and accused the trustee of using strong-arm tactics to force a settlement.
He said there would be no further comment, including on any speculation that the partners would have to consider selling the team.
Sterling's lawyers say the Wilpons and team president Saul Katz lost "over $500 million" from investments in the Ponzi scheme run by Madoff. They say the group lost another $160 million not included in Picard's calculations.
What the lawsuit, and the $1 billion figure, mean for the Mets remains unclear. The Wilpons have been looking for a minority investor to buy a 25 percent stake in the team - a search they made public on Jan. 28 - and settlement negotiations with Picard were officially called off last week. Forbes magazine in the past year estimated the team's value at $850 million.
Experts interviewed Saturday said that it's impossible to know yet what this case ultimately will cost the Wilpons - or whether they can maintain financial control of the Mets.
"We don't know what other assets Sterling has," said Mike Cramer, the former president and minority owner of the Texas Rangers, which were sold last year. "We just don't know how much they need out of the Mets." But a prevailing claim of several hundred million dollars "could force the sale of the majority interest," he said.
Robert A. Boland, a professor of sports business at New York University's Tisch Center for sports management, said the key to keeping the team will be to find a competitive market for minority shares and raise capital.
"It won't close the gap but it will buy some breathing room," he said. "Then the family could have the space to operate while hopefully SNY [the Mets TV network] continues to generate revenue, Sandy Alderson cuts payroll effectively . . ."